You’d think, from its lore, that a law like the Sherman Antitrust Act exists to break up big conglomerations of corporate power. But from the start, one of the most common uses of US antitrust policy has been to prevent smaller players from gaining the market power to survive against their biggest competitors. Antitrust law has stopped workers from organizing, farmers from cooperating, and small businesses from fighting big boxes.
Case in point: As Uber drivers in Seattle are trying to collectively bargain with their pseudo-employer—a company seeking a global transportation monopoly—it’s the drivers who are in danger of running afoul of antitrust law for trying to organize.
Now there is a new case worth considering. BuzzFeed founder Jonah Peretti has suggested that his company and others like it—the Vox-es, the Vice-es—should band together in a conglomerate powerful enough to take on the likes of Facebook, which controls much of their traffic flow and advertising revenue. This is an attention-getting idea because it seems both necessary and abhorrent. Yes, of course, somebody needs to take on Mark Zuckerberg. But do we really need another unaccountable corporate media behemoth to do it?
At this point, we probably do, and the reason is antitrust law. It’s legal to be a bully if you’re a big, single corporation, but smaller organizations are not allowed to build power by acting in concert. This needs to change.
A century ago, farmers knew this, and their organizations had to power to be heard. In 1922, they forced Congress to pass the Capper-Volstead Act, which protected farmer cooperatives from the worst abuses of antitrust law. For Senator Arthur Capper, the point as “to give to the farmer the same right to bargain collectively that is already enjoyed by corporations.” This enabled family farmers to build businesses strong enough to control their own market access, rather than relying on urban bankers and railroad barons who had every incentive to exploit them. Even now, such cooperatives represent a significant slice of the rural economy, including such brands as Land O’Lakes, Cabot Creamery, and Organic Valley.
As Sandeep Vaheesan of the Open Markets Institute and I have argued, what the farmers demanded then should be much more available in every sector of the economy: the right of individuals and smaller businesses to bargain collectively.
This is especially urgent at a time when unions still organized according to the labor-relations regime of the 1930s are facing steep declines, even though the labor market looks nothing like it did in the last century. In addition to resisting anti-union forces, we need to open up new sectors for labor organizing. Freelance workers, domestic workers, self-employed tradespeople, farm workers, and others who have been inadequately served under the New Deal system should all be able to form collectives, but the current condition of antitrust law prevents them from doing so.
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A similar problem holds for small businesses trying to thrive in an economy made for big corporations. For generations, purchasing cooperatives like Ace Hardware and CCA Global Partners have lent local retailers the buying power to hold their own, along with access to decent benefits packages for their employees. These kinds of structures deserve to be much more widespread if we want to reverse the trend of corporate consolidation. As the Open Markets Institute’s Phillip Longman recently argued in Washington Monthly, we need to make the law safe for “small-business collusion.”
This kind of collusion, of course, is not universally benign. The Capper-Volstead Act included oversight provisions to prevent the farmer co-ops from becoming coercive monopolies themselves—provisions that have not always been adequate. But at a time when even The Economist is decrying the excesses of corporate power, we can afford to err on the side of cooperation.
In the case of media organizations, cooperative association has been a vital strategy for nearly two centuries. The Associated Press, founded in the 1840s, has been a bulwark of local news organizations. (To the credit of the Sherman Act, it enabled the Supreme Court to tame AP members’ cronyist practices in 1945.) And this cooperative, with its just-the-facts values, is one of the few media outlets that compete with the reach of fake-news Facebook; AP claims to reach half the population of the world every day.
A new generation of 21st-century, social-first media associations could be a more appealing alternative to Jonah Peretti’s anti-Facebook conglomerate. Bargaining cooperatives among Uber drivers, house cleaners, church organists, and other kinds of workers could help jump-start a labor movement more attuned to the changing contexts of work. But these may require a reconsideration of how antitrust law is written and, especially, enforced.
Like any policy doctrine, antitrust was born out of compromise—in this case, between the robber barons and the people organizing to resist their excesses. Perhaps someday we will finally shift the balance of power toward the latter.
